MARKET LIBERALIZATION IMPACT ON OIL RETAIL PRICES IN NORTH MACEDONIA AND THE EX YU REGION

Abstract

Market liberalization is often regarded as a process of freeing the market from all types of monopolies, which should eventually increase the competition and provide better offer followed by lowers prices. In terms of oil economics, regulated oil retail prices are often regarded as contra productive for sustainable economic growth. Market liberalization contributes for countries not to depend on a single company in the import and sales of oil products and thus guarantees energy stability. Liberalization and oil retail prices are often interrelated and the effect of its interaction is usually the one affecting the prospects of the entire economy. This paper emphasizes the importance of market liberalization and its influence on oil retail prices. This paper is explicitly focused on the leading oil companies in North Macedonia and the Ex Yu region. The aim of this paper is to present the market liberalization process in the oil industry by analyzing the effect of market liberalization on oil retail prices. The research is concentrated on six leading oil companies, with particular focus on the oil retail prices. The research outcome revealed that full market liberalization is not always beneficial and might have different effect on country’s business economy and energy infrastructure.

Keywords

• market liberalization
• oil industry
• oil retail prices

KUZEY MAKEDONYA VE ESKİ YUGOSLAVYA BÖLGESİNDE, PETROL PİYASASININ LİBERALLEŞMESİNİN PETROL PERAKENDE FİYATLARI ÜZERİNDEKİ ETKİSİ

Öz

Piyasa liberalizasyonu genel olarak piyasayı her tür tekel piyasadan kurtarma süreci olarak kabul edilerek, rekabeti arttırmalı ve daha iyi teklif sunarak fiyatları düşürmelidir. Petrol ekonomisi açısından, düzenlenmiş petrol perakende fiyatları genellikle sürdürülebilir ekonomik büyüme için ters üretken olarak kabul edilmektedir. Piyasanın liberalleşmesi, ülkelerin petrol ürünlerinin ithalatında ve satışında tek bir şirkete bağlı kalmamasına katkıda bulunarak enerji istikrarını garanti altına alır. Liberalleşme ve petrol perakende fiyatları genellikle ters orantılıdır, ve bu orantı genellikle tüm ekonominin beklentilerini etkiler.Bu makale, piyasa liberalizasyonunun önemini ve bunun perakende petrol fiyatları üzerindeki etkisini vurgulamaktadır. Bu makale, piyasa liberalizasyonunun önemini ve bunun perakende petrol fiyatları üzerindeki etkisini vurgulamaktadır. Bu makale açıkça Kuzey Makedonya ve Eski Yugoslavya bölgesindeki önde gelen petrol şirketlerine odaklanmıştır. Bu makalenin amacı, petrol piyasası liberalizasyonunun perakende petrol fiyatları üzerindeki etkisini analiz ederek petrol endüstrisindeki piyasa liberalizasyon sürecini sunmaktır. Araştırma, özellikle petrol perakende fiyatlarına odaklanarak önde gelen altı petrol şirketi üzerinde yoğunlaşmıştır. Araştırma sonucu, tam piyasa liberalizasyonunun her zaman yararlı olmadığını ve ülkenin iş ekonomisi ve enerji alyapısı üzerinde farklı etkileri olabileceğini ortaya koydu.

Anahtar Kelimeler

• market liberalization
• oil industry
• oil retail prices

Kaynakça

1. Acheampong, T. & Ackah, I. (2015). Petroleum Product Pricing, Deregulation and Subsidies in Ghana: Perspectives on Energy Security, MPRA Paper, 1-12
2. Association of Oil Companies of Serbia (2011). Analize trzista derivate nafte Republike Srbije, Nacionalni Naftni Komitet Srbije - WPC, 1-15
3. Bacon, R. & Kojima, M. (2010). “Rockets and Feathers: Asymmetric Petroleum Product Pricing in Developing Countries”, World Bank – Oil, Gas, Mining Policy Division Working Paper. 1-43
4. Bajo, A. & Klemencic, I. (2012). “Cijena nafte i naftnih derivata”, Porezni vijesnik, 21 (7), 117-132.
5. Baumol, W.J., Panzar, J.C., and Willig, R.D. (1982). Contestable Markets and the Theory of Industry Structure. New York: Harcourt, Brace, Jovanovich.
6. Benedict, C., Jung, H.S., and Gupta, S. (2003). “Real and Distributive Effects of Petroleum Prices Liberalization: The Case of Indonesia. IMF Working Paper, 1-19.
7. Carollo, S. (2011). Understanding Oil Prices: A Guide to What Drives the Price of Oil in Today’s Markets. The Wiley Finance Series.
8. Capece, G., Cricelli, L., Di Pillo, F., Levialdi, N. (2007). “Impact of Liberalization on Italian Retail Gas Prices, Conference Paper: The 16th IASTED International Conference on Applied Simulation and Modeling, 403-408

9. Cavrak, V., Gelo, T., and Pripuzic, D. (2006). “Politika Cijena u Energetskom Sektoru I Utjecaj Cijena Energenata na Gospodarski Razvoj Republike Hrvatske”, Zbornik Ekonomskog Fakulteta u Zagrebu, Vol. 4, 45-67
10. Danwitz, T. (2006). “Regulation and liberalization of the European Electricity Market – A German View, Energy Law Journal, Vol. 27, 423-449
11. Debab, N. and Radhi, S.J. (2011). “Effects of Trade Liberalization on Domestic Consumers Prices: A case study of Gulf Cooperation Council, European Journal of Economics, Finance, and Administrative Science, Issue 37, 148-159
12. ERC. (2019). Energy Regulatory Commission of North Macedonia. ERC: https://www.erc.org.mk/pages.aspx?id=18 European Commission (2018). Excise duties Tables. European Commission: https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/excise_duties/energy_products/rates/excise_duties-part_ii_energy_products_en.pdf
13. Fasoula, E. & Schweikert, K. (2018). “Price regulations and price adjustment dynamics: Evidence from the Austrian retail fuel market”, Hohenheim Discussion Papers in Business, Economics, and Social Sciences, 1-21
14. Husain, A.M., Arezki, R., Breuer, P., Haksar, V., Helbling, T., Medas, P., Sommer, M. (2015). “Global Implications of Lower Oil Prices”, Working Paper, 1-41
15. Garcia, J.P. (2010). “Dynamic pricing in the Spanish gasoline market: A tacit collusion equilibrium”, Energy Policy, 38 (4), 1931-1937
16. Goldthau, A. & Witte, J.M. (2008). Global Energy Governance: The New Rules of the Game. Brooking Institution Press.
17. Kojima, M. (2013). “Petroleum product pricing and Complementary policies: Experience of 65 Developing countries since 2009” Policy Research Working Paper 6396, The World Bank Sustainable Energy Department Oil, Gas, and Mining Unit.
18. Mitchell, J., Marcel, V., and Mitchell, B. (2012). What Next for Oil and Gas Industry? Chatam House. The Royal Institute of International Affairs, 1-108
19. Musselli, I. & Zarrilli, S. (2005). “Oil and Gas Services: Market Liberalization and the Ongoing GATS Negotiations”, Journal of International Economic Law, 8 (2), 551-581
20. Nemac, F. & Saver, A. (1995), “Price Models for oil derivatives in Slovenia” Agency for Energy Restructuring Ljubljana, Slovenia, 87-95
21. Joubert, P., Celestin, N., Celestin, T.S., and Ledoux, S. (2018). “The Impact of Liberalization on Petroleum Product Prices on the Economy of Cameroon”, Working Paper 346, African Economic Research Consortium, Research Department, 1-66
22. Price, W.C. (2007). “The effect of liberalizing UK retail energy markets on consumers”, Oxford Review of Economic Policy, 21 (5), 128-144
23. Pollitt, M.G. (2012). “The role of policy in energy transition era: lessons from the energy liberalization era, Cambridge Working Paper on Economics 1208, 1-29
24. Porter, M.E. (1985). The Competitive advantage: Creating and Sustaining Superior Performance. New York: Free Press.
25. Pintado, A.B. & Cavero, S. (2007). “The Spanish retail petroleum market: New patterns of competition since the liberalization of the industry”, Energy Policy, 36 (2), 612-626
26. Szulecki, K. (2016). “European energy governance and decarbonization policy: learning from the 2020 strategy”, Climate Policy, 16 (5), 543-547
27. Udovicki, K. & Djokovic, V. (2005). “Kvalitet i cenovna struktura naftnih derivata: Uvodne I metodoloske napomene”, Quarterly monitor of economic trends in Serbia, No.3 Oct-Dec, 1-9
28. Wieringa, J.E. & Verhoef, P.C. (2007). “Understanding Customer Switching Behavior in a Liberalized Service Market: An Exploratory Study, Journal of Service Research, 10 (2), 174-186